Silver makes “another day, another dollar” to $46

Not everyone is on board with the scenario that envisions a rapid shift in Fed policy however. At least as regards the Treasury bond markets, the signals are of the variety that are currently apparently factoring in continued Fed largesse for a while longer. Ironically, the speculation that such a holding off on the exit from accommodation is based upon, is the progress that is being made by US lawmakers in their quest to cut US deficits. The implication that an agreement being reached to reduce the ratio of debt-to-GDP might result in a lower level of US economic expansion is that the Fed would try to offset it by maintaining low rates into 2012.

There are however also signs that despite recent serious bi-partisan efforts to rein in the US fiscal deficits, the US public wants the best of both worlds; no higher taxes and a continuation of entitlement programs it has become accustomed to. Having one’s cake and eating it too is a desire manifest at the current time. A major survey by the Washington Post-ABC News reveals that Americans would rather, for example, leave Medicare alone in its current guise. Another “sacred cow” that few are willing to touch with the budget-cutting axe is defense. More than 50% of those polled in the survey do not want their taxes to go up but are all eager to have the wealthy class pay more in same. Such findings came despite a recent recommendation by the National Commission on Fiscal Responsibility for “shared sacrifice” among Americans of all socio-economic stripes and it does not bode well for the future of the discussions and possible actions relating to the thorny problem of America’s debt.

Spot silver continued its very-near-vertical trail and opened with a 78-cent gain at $46.01 (another day, another dollar is the emerging mantra) per ounce. Overnight highs were etched into record books at the $46.30 per ounce mark. While there is little that stands between current values and the 1980 high in silver, the aforementioned EW analytical team notes that the white metal is currently in “the blow-off stage of its ascent, the most intense speculative phase of any market advance.”

South Africa’s Business Day quoted widely divergent opinion by metals analysts as regards where the markets currently are and where they might be in the not-so-distant future. Noted London-based Credit Agricole analyst Robin Bhar was quoted as saying that silver (and gold) while in a “perfect storm” has been the subject of “bullying” by some hedge funds in recent sessions. “Poor man’s gold” has morphed into anything but poor ever since around Valentine’s Day (when it was quoted at a then lofty $30/oz.).

Platinum and palladium also continued their recent string of robust advances and remained partially bolstered by the similar types of assumptions that have been pushing the entire commodities’ complex to stratospheric levels; the implicit bet that the Fed will keep the interest rate environment in the US at near-record low levels for a while longer, thus enabling the heavy and relatively cost-free participation by speculators in the commodities’ space. Platinum started the session near the $1,813.00 bid quote per ounce (a gain of $14) while palladium advanced by $4 to the $762.00 per ounce mark.